Franklin manufactures custom sailboats. Franklin's facility is 200,000 square feet, 150,000 of which contain the manufacturing operations.
1. Depreciation: $100,000 on the building, $25,000 on shop equipment; $25,000 on company owned vehicles used by the sales team; $25,000 on the computers & equipment used in the accounting department.
2. Wages: paid to production workers for time spent working on jobs $225,000, $75,000 paid to the accounting supervisor; $15,000 paid to production workers for time spent cleaning the shop.
3. Utilities and real estate taxes totaled $300,000 for the year.
4. Cost of the blades used to build the rudders $75,000.
5. Dollar 10,000 of travel cost & registration fees for three production supervisors to attend a week long seminar covering changes to the federal safety regulations applicable to boat manufacturers. What portion of the $850,000 of cost listed above would be considered product cost?
A. $225,000
B. $725,000
C. $525,000
D. $650,000
E. None of the above